Schneider National Inc
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
SNDR$27.81-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001692063-24-000100
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001692063-24-000121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 181 current paragraphs.
79 unchanged; 33 reworded; 43 added; 6 removed; 1 previous and 26 current paragraphs rearranged.
Tables are not compared: 15 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
(1)Includes $2.9 million for the three and six months ended June 30, 2023 for charges related to adverse audit assessments for prior period state sales tax on rolling stock equipment used within that state. Refer to Note 12, Commitments and Contingencies, for additional details.
Current report
Enterprise net income decreased $42.2 million, approximately 54%, in the second quarter of 2024 compared to the same quarter in 2023, primarily due to a $52.8 million decrease in income from operations, partially offset by the corresponding $14.0 million decrease in the provision for income taxes.
Current report
Adjusted net income decreased $43.4 million, approximately 54%.
Current report
•and a $6.8 million decrease in fuel surcharge revenues resulting from decreased fuel prices;
Current report
•partially offset by a $7.6 million increase in Truckload segment revenues (excluding fuel surcharge) primarily related to organic and acquisitive growth within Dedicated, inclusive of the M&M acquisition, and increases in revenue per truck per week. This was partially offset by a decline in Network trucks and revenue per truck per week.
Current report
M&M acquisition, a slight increase in Intermodal volume, and declines in purchased transportation costs.
Current report
Total other expenses increased $3.4 million in the second quarter of 2024 compared to the same quarter in 2023. This change was primarily the result of an increase of $1.9 million in interest expense combined with a decrease of $1.7 million in interest income for the second quarter of 2024 compared to the same quarter of 2023.
Current report
Revenues and Income (Loss) from Operations by Segment
Current report
Truckload revenues (excluding fuel surcharge) increased $7.6 million, in the second quarter of 2024 compared to the same quarter in 2023. This was driven by an increase in volume within Dedicated due to acquisitive and organic growth, partially offset by lower rate per loaded mile and volume in our Network business.
Current report
(3)Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
Current report
Logistics income from operations decreased $1.6 million, approximately 13%, in the second quarter of 2024 compared to the same quarter in 2023 due to lower volumes and reduced net revenue per order.
Current report
Other income from operations decreased $8.0 million in the second quarter of 2024 compared to the same quarter in 2023, mainly driven by a decrease in earnings within our leasing business.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Enterprise Results Summary
Current report
Adjusted net income decreased $121.9 million, approximately 69%.
Current report
Components of Enterprise Net Income
Current report
Enterprise Revenues
Current report
Enterprise operating revenues decreased $139.5 million, approximately 5%, in the six months ended June 30, 2024 compared to the same period in 2023.
Current report
Factors contributing to the decrease were as follows:
Current report
•partially offset by an $8.7 million increase in Truckload segment revenues (excluding fuel surcharge) driven by an increase in Dedicated, including the M&M acquisition, and increases in revenue per truck per week. This was partially offset by declines in revenue within our Network business due to decreases in revenue per order and volume resulting from ongoing soft market conditions, and Network revenue per truck per week.
Current report
Enterprise revenues (excluding fuel surcharge) decreased $109.4 million, approximately 4%.
Current report
Enterprise income from operations decreased $138.7 million, approximately 64%, in the six months ended June 30, 2024 compared to the same period in 2023, primarily due to a decrease in net revenue per order in Logistics, revenue per order in Intermodal, and revenue per truck per week in Truckload resulting from ongoing pricing pressures. The revenue impact of volume declines within our brokerage business was driven by continued downward pressure on brokerage demand. Also contributing to the decrease was an increase in driver wages primarily from increased headcount including the M&M acquisition, a reduction in gains on equipment sales, increases in insurance expense, and increased depreciation due to an increase in revenue equipment counts. These factors were partially offset by an increase in Truckload volumes attributable to our legacy Dedicated business and the M&M acquisition, a slight increase in Intermodal volumes, and reduced purchased transportation costs.
Current report
Adjusted income from operations decreased $139.0 million, approximately 63%.
Current report
Enterprise Operating Expenses
Current report
•Purchased transportation costs decreased $92.9 million, or 8%, period over period, primarily resulting from decreased third-party carrier costs within Logistics due to lower purchased transportation costs per order and brokerage volumes, as well as a decline in owner-operator purchased transportation costs within Truckload due to a reduction in owner-operator capacity and lower pay per mile.
Current report
•Salaries, wages, and benefits increased $44.1 million, or 7%, period over period, largely due to an increase in driver headcount within Dedicated, inclusive of the M&M acquisition.
Current report
•Depreciation and amortization increased $20.3 million, or 11%, period over period, mainly due to additional depreciation expense resulting from trailer and tractor growth within Dedicated, the ongoing impacts from the increased cost of equipment, and incremental depreciation and amortization expense related to the M&M acquisition.
Current report
•Insurance and related expenses increased $13.9 million, or 28%, period over period, driven by an increase in auto liability insurance costs related to an increase in premiums and severity of claims.
Current report
•Other general expenses decreased $7.1 million, or 11%, period over period, largely related to a decrease in driver onboarding costs as fewer drivers were hired due to market conditions along with a reduction in bad debt expense.
Current report
Total Other Expenses (Income)
Current report
Income Tax Expense
Current report
Revenues and Income (Loss) from Operations by Segment
Current report
Truckload
Current report
Truckload income from operations decreased $81.8 million, approximately 64%, in the six months ended June 30, 2024 compared to the same period in 2023. Factors contributing to the decreased income from operations include the revenue impacts of Network listed above, an increase in driver wages (due to increased driver headcount, primarily related to the M&M acquisition), a decrease in gains on equipment sales, increased insurance premium expense, and an increase in depreciation expense as a result of growth within Dedicated (including the M&M acquisition). This was partially offset by a decrease in purchased transportation costs driven by reduced owner operator capacity.
Current report
Intermodal
Current report
(3)Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
Current report
Intermodal revenues (excluding fuel surcharge) decreased $26.8 million, approximately 5%, in the six months ended June 30, 2024 compared to the same period in 2023. This was driven by market conditions which led to a $157, or 6%, decrease in revenue per order, partially offset by a slight increase in volume.
Current report
Intermodal income from operations decreased $32.1 million, approximately 60%, in the six months ended June 30, 2024 compared to the same period in 2023 mainly the result of factors impacting revenues discussed above, as well as an increase in rail-related costs and wages. This was partially offset by network management and operational and dray cost improvements.
Current report
Logistics
Current report
Logistics revenues (excluding fuel surcharge) decreased $81.9 million, approximately 11%, in the six months ended June 30, 2024 compared to the same period in 2023. This was mainly the result of decreases in revenue per order and volume within our brokerage business, as well as reduced port dray revenues due to improved port fluidity in 2024.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (6)
Previous report
Adjusted net income decreased $78.5 million, approximately 80%.
Previous report
Enterprise revenues (excluding fuel surcharge) decreased $86.4 million, approximately 7%.
Previous report
Adjusted income from operations decreased $84.6 million, approximately 74%.
Previous report
Revenues and Income from Operations by Segment
Previous report
(4)Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
Previous report
Other income from operations decreased $2.1 million in the first quarter of 2024 compared to the same quarter in 2023. Lower income from our leasing business was offset by a decrease in our performance-based incentive compensation.
Reworded paragraphs (33)
Previous wording
(6)We define “free cash flow” as net cash provided by operating activities less net cash used for capital expenditures.
Current wording
(6)We define “free cash flow” as net cash provided by operating activities less net cash used for capital expenditures. Included below is a reconciliation of net cash provided by operating activities, which is the most directly comparable GAAP measure, to free cash flow.
Previous wording
(1)Amortization expense related to intangible assets acquired through recent business acquisitions. As we finalized our purchase accounting adjustments related to intangible assets, and to better reflect our ongoing operations, we made the decision to exclude the related amortization expense from non-GAAP earnings beginning in the fourth quarter of 2023.
Current wording
(2)Amortization expense related to intangible assets acquired through recent business acquisitions. As we finalized our purchase accounting adjustments related to intangible assets, we made the decision to exclude the related amortization expense from adjusted income from operations and adjusted net income beginning in the fourth quarter of 2023. Although intangible assets contribute to our revenue generation, the amortization of intangible assets does not directly relate to transportation services provided to our customers.
Previous wording
Enterprise operating revenues decreased $109.7 million, approximately 8%, in the first quarter of 2024 compared to the same quarter in 2023.
Current wording
Enterprise operating revenues decreased $29.8 million, approximately 2%, in the second quarter of 2024 compared to the same quarter in 2023.
Previous wording
•a $57.3 million decrease in Logistics segment revenues (excluding fuel surcharge) driven by decreased revenue per order resulting from continued challenges in the freight environment and a decline in volume within our brokerage business;
Current wording
•a $24.6 million decrease in Logistics segment revenues (excluding fuel surcharge) driven by decreased revenue per order and a decline in volume within our brokerage business due to freight market conditions;
Previous wording
Enterprise income from operations decreased $85.9 million, approximately 75%, in the first quarter of 2024 compared to the same quarter in 2023, primarily due to a decrease in net revenue per order in Logistics, revenue per order in Intermodal, and revenue per truck per week in Truckload resulting from ongoing pricing pressures. The revenue impacts of volume declines within our brokerage business and Intermodal were driven by continued downward pressure on industry demand. A reduction in gains on equipment sales and ongoing inflationary impacts also contributed to the decrease. These factors were partially offset by an increase in Truckload volumes driven by dedicated growth, including the M&M acquisition, and declines in purchased transportation costs, performance-based incentive compensation, equipment rental expense, and rail expense.
Current wording
Enterprise income from operations decreased $52.8 million, approximately 51%, in the second quarter of 2024 compared to the same quarter in 2023, primarily due to a decrease in net revenue per order in Logistics, revenue per order in Intermodal, and revenue per truck per week in Truckload resulting from ongoing pricing pressures. The revenue impact of volume declines within our brokerage business was driven by continued downward pressure on brokerage demand. An increase in driver wages due to increased headcount primarily from the M&M acquisition, a reduction in gains on equipment sales, an increase in depreciation due to an increase in revenue equipment counts, and increases in insurance expense also contributed to the decrease. These factors were partially offset by an increase in Truckload volumes driven by Dedicated growth, including the
Previous wording
Enterprise operating ratio (operating expenses as a percentage of operating revenues) increased on both a GAAP and adjusted basis when compared to the first quarter of 2023.
Current wording
Enterprise operating ratio (operating expenses as a percentage of operating revenues) increased on both a GAAP and adjusted basis when compared to the second quarter of 2023.
Previous wording
•Purchased transportation decreased $54.4 million, or 10%, quarter over quarter, primarily resulting from a decline in third-party carrier costs within Logistics due to lower brokerage volume and purchased transportation costs per order. Owner-operator purchased transportation costs also declined within Truckload due to a reduction in owner-operator capacity and lower rate per mile.
Current wording
•Purchased transportation decreased $38.5 million, or 7%, quarter over quarter, primarily resulting from a decline in third-party carrier costs within Logistics due to lower brokerage volume and purchased transportation costs per order. Owner-operator purchased transportation costs also declined within Truckload due to a reduction in owner-operator capacity.
Previous wording
•Salaries, wages, and benefits increased $17.3 million, or 5%, quarter over quarter, mainly due to driver wages and benefits related to the M&M acquisition along with an increase to driver headcount within Dedicated; partially offset by a decrease in performance-based incentive compensation.
Current wording
•Salaries, wages, and benefits increased $26.8 million, or 8%, quarter over quarter, mainly due to driver wages and benefits related to the increase in driver headcount within Dedicated, including the M&M acquisition.
Previous wording
•Fuel and fuel taxes for company trucks decreased $5.3 million, or 5%, quarter over quarter, driven by a decrease in cost per gallon. A significant portion of fuel costs are recovered through our fuel surcharge programs.
Current wording
•Fuel and fuel taxes for company trucks increased $3.9 million, or 4%, quarter over quarter, driven by an increase in company driver miles, partially offset by a decrease in cost per gallon. A significant portion of fuel costs are recovered through our fuel surcharge programs.
Previous wording
•Depreciation and amortization increased $11.0 million, or 12%, quarter over quarter, mainly due to additional depreciation expense incurred as a result of trailer and tractor growth within Dedicated, inflationary unit costs for new equipment, and incremental depreciation and amortization expense related to the M&M acquisition.
Current wording
•Depreciation and amortization increased $9.3 million, or 10%, quarter over quarter, mainly due to additional depreciation expense incurred as a result of trailer and tractor growth within Dedicated, the cumulative impacts from the increased cost of equipment, and incremental depreciation and amortization expense related to the M&M acquisition.
Previous wording
•Insurance expense increased $6.4 million, or 26%, quarter over quarter, driven by an increase in auto liability insurance costs related to recent unfavorable claims severity.
Current wording
•Insurance expense increased $7.5 million, or 29%, quarter over quarter, driven by an increase in auto liability insurance costs related to an increase in premiums and severity of claims.
Previous wording
•Other general expenses decreased $4.5 million, or 13%, quarter over quarter, primarily related to decreased driver onboarding costs.
Current wording
•Other general expenses decreased $2.6 million, or 9%, quarter over quarter, primarily related to a reduction in bad debt expense.
Previous wording
Our provision for income taxes decreased $25.1 million, or 80%, in the first quarter of 2024 compared to the same quarter in 2023, primarily due to lower taxable income. The effective income tax rate was 25.0% for the three months ended March 31, 2024 compared to 24.2% for the same quarter last year. Our provision for income taxes may fluctuate in future periods to the extent there are changes to tax laws and regulations.
Current wording
Our provision for income taxes decreased $14.0 million, or 54%, in the second quarter of 2024 compared to the same quarter in 2023, primarily due to lower taxable income. The effective income tax rate was 25.0% for the three months ended June 30, 2024 compared to 24.9% for the same quarter of 2023. Our provision for income taxes may fluctuate in future periods to the extent there are changes to tax laws and regulations.
Previous wording
The following tables summarize revenues and income from operations by segment.
Current wording
The following tables summarize revenues and income (loss) from operations by segment.
Previous wording
Truckload income from operations decreased $47.7 million, approximately 76%, in the first quarter of 2024 compared to the same quarter in 2023. In addition to the impact of rate per loaded mile, other items contributing to the decrease in income from operations include increases in salaries and wages expense primarily related to the M&M acquisition, decreases in gains on equipment sales, an increase in depreciation resulting from dedicated growth (including M&M) and inflationary unit costs for new equipment, and increased insurance expense. These items were partially offset by a decrease in owner-operator purchased transportation costs.
Current wording
Truckload income from operations decreased $34.1 million, approximately 53%, in the second quarter of 2024 compared to the same quarter in 2023. In addition to the revenue impacts of lower volumes and rate per loaded mile within Network, other items contributing to the decreased income from operations include an increase in salaries and wages expense due to higher driver headcount inclusive of the M&M acquisition, lower gains on equipment sales, and increased insurance premium expense. This was partially offset by decreased purchased transportation costs driven by a reduction in owner operator capacity.
Previous wording
(3)Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes.
Current wording
(2)Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes.
Previous wording
Intermodal revenues (excluding fuel surcharge) decreased $18.9 million, approximately 7%, in the first quarter of 2024 compared to the same quarter in 2023, primarily due to a decrease in revenue per order of $186, or 7%, driven by market conditions and freight mix.
Current wording
Intermodal revenues (excluding fuel surcharge) decreased $7.9 million, approximately 3%, in the second quarter of 2024 compared to the same quarter in 2023 primarily due to a decrease in revenue per order of $126, or 5%, driven by market conditions and freight mix, partially offset by an increase in volume.
Previous wording
Intermodal income from operations decreased $23.0 million, approximately 77%, in the first quarter of 2024 compared to the same quarter in 2023. Factors contributing to the decrease include the revenue impacts cited above, partially offset by a decrease in dray and rail-related costs.
Current wording
Intermodal income from operations decreased $9.1 million, approximately 38%, in the second quarter of 2024 compared to the same quarter in 2023. Factors contributing to the decrease include the revenue impacts cited above and an increase in rail-related costs due to higher volumes. partially offset by network management and operational and dray cost improvements.
Previous wording
Logistics revenues (excluding fuel surcharge) decreased $57.3 million, approximately 15%, in the first quarter of 2024 compared to the same quarter in 2023. This was primarily due to a decrease in brokerage revenue per order and an 8% reduction in brokerage volume driven by market conditions, as well as lower port dray revenues.
Current wording
Logistics revenues (excluding fuel surcharge) decreased $24.6 million, approximately 7%, in the second quarter of 2024 compared to the same quarter in 2023. This was primarily due to a decrease in brokerage revenue per order and a 4% reduction in brokerage volume driven by continued softness in the market.
Previous wording
Enterprise net income decreased $79.5 million, approximately 81%, in the first quarter of 2024 compared to the same quarter in 2023, primarily due to a $85.9 million decrease in income from operations and an $18.7 million unfavorable change to total other expenses (income)—net driven by lower gains on our equity investments. In the three months ended March 31, 2024, the Company recognized pre-tax net losses of $0.1 million compared to $17.6 million in pre-tax net gains on our equity investments during the three months ended March 31, 2023. These items were partially offset by the corresponding $25.1 million decrease in the provision for income taxes.
Current wording
Enterprise net income decreased $121.7 million, approximately 69%, in the six months ended June 30, 2024 compared to the same period in 2023, primarily due to a $138.7 million decrease in income from operations and a $22.1 million unfavorable change in total other expenses (income)—net related largely to decreased gains on our equity investments and lower interest income. Decreases were partially offset by the corresponding $39.1 million decrease in the provision for income taxes. In the six months ended June 30, 2024, the Company recognized pre-tax net losses of $0.2 million compared to $17.7 million in pre-tax gains on our equity investments during the six months ended June 30, 2023.
Previous wording
•a $23.3 million decrease in fuel surcharge revenues primarily related to decreased fuel prices;
Current wording
•a $30.1 million decrease in fuel surcharge revenues resulting from decreased fuel prices;
Previous wording
•and an $18.9 million decrease in Intermodal segment revenues (excluding fuel surcharge) due to reduced revenue per order.
Current wording
•and a $26.8 million decrease in Intermodal segment revenues (excluding fuel surcharge) due to a decrease in revenue per order;
Previous wording
•Operating supplies and expenses—net increased $5.7 million, or 4%, quarter over quarter, largely resulting from a decrease in gains on sales of equipment due to a decrease in average sales price. This was partially offset by a decrease in equipment rental expense driven by improved port fluidity and decreased ramp storage.
Current wording
•Operating supplies and expenses—net increased $22.3 million, or 8%, period over period, driven by a reduction in gains on equipment sales due to a decrease in average sale price and an increase in cost of goods sold in our leasing business. These factors were partially offset by a decrease in equipment rental expense as a result of improved port fluidity and lower rail storage expense.
Previous wording
Total other income decreased $18.7 million in the first quarter of 2024 compared to the same quarter in 2023. This change was primarily the result of pre-tax net losses on our equity investments of $0.1 million in the first quarter of 2024 compared to pre-tax net gains of $17.6 million in the first quarter of 2023.
Current wording
Total other income decreased $22.1 million, approximately 157%, in the six months ended June 30, 2024 compared to the same period in 2023. This change was primarily driven by pre-tax net losses on our equity investments of $0.2 million in 2024 compared to pre-tax net gains of $17.7 million in 2023. Interest income also decreased $3.0 million in 2024 compared to 2023 primarily due to lower cash balances. See Note 6, Investments, for more information on our equity investments.
Previous wording
(2)Includes company and owner-operator trucks at the end of the period.
Current wording
(2)Includes company and owner-operator trucks.
Previous wording
Truckload revenues (excluding fuel surcharge) increased $1.1 million, in the first quarter of 2024 compared to the same quarter in 2023. Rate per loaded mile decreased 3%, due to market conditions; this was partially offset by a 3% increase in volume, driven by dedicated growth.
Current wording
Truckload revenues (excluding fuel surcharge) increased $8.7 million, approximately 1%, in the six months ended June 30, 2024 compared to the same period in 2023. Volume increased slightly, largely driven by increased Dedicated volume due to organic new business growth and the acquisition of M&M, offset by a reduction in Network volume and rate per loaded mile due to market conditions.
Previous wording
Logistics income from operations decreased $13.1 million, approximately 71%, in the first quarter of 2024 compared to the same quarter in 2023 due to the revenue impacts listed above, partially offset by a decrease in third-party carrier costs.
Current wording
Logistics income from operations decreased $14.7 million, approximately 47%, in the six months ended June 30, 2024 compared to the same period in 2023, primarily due to the factors related to revenue listed above. This was partially offset by decreases in third party transportation costs per order.
Previous wording
Historically, our primary source of liquidity has been cash flow from operations. In addition, we have a $250.0 million revolving credit facility maturing in November 2027 and a $150.0 million receivables purchase agreement maturing in July 2024, for which our combined available capacity as of March 31, 2024 was $215.6 million. Our revolving credit facility also allows us to request an additional increase in total commitment by up to $150.0 million. We had maximum borrowings under the facilities of $115.0 million during the three months ended March 31, 2024. We anticipate that cash generated from operations, together with amounts available under our credit facilities, will be sufficient to meet our requirements for the foreseeable future. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that we will obtain these funds through additional borrowings, equity offerings, or a combination of these potential sources of liquidity. Our ability to fund future operating expenses and capital expenditures, as well as our ability to meet future debt service obligations or refinance our indebtedness, will depend on our future operating performance, which will be affected by general economic, financial, and other factors beyond our control.
Current wording
Historically, our primary source of liquidity has been cash flow from operations. In addition, we have a $250.0 million revolving credit facility maturing in November 2027 and a $200.0 million receivables purchase agreement maturing in May 2027, for which our combined available capacity as of June 30, 2024 was $305.7 million. Our revolving credit facility also allows us to request an additional increase in total commitment by up to $150.0 million. We had maximum borrowings under the facilities of $145.0 million during the six months ended June 30, 2024. We anticipate that cash generated from operations, together with amounts available under our credit facilities, will be sufficient to meet our requirements for the foreseeable future. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that we will obtain these funds through additional borrowings, equity offerings, or a combination of these potential sources of liquidity. Our ability to fund future operating expenses and capital expenditures, as well as our ability to meet future debt service obligations or refinance our indebtedness, will depend on our future operating performance, which will be affected by general economic, financial, and other factors beyond our control.
Previous wording
Net cash provided by operating activities decreased $85.5 million, approximately 47%, in the first three months of 2024 compared to the same period in 2023. The decrease was a result of a decrease in net income adjusted for various noncash items and an increase in cash used for working capital. Working capital changes were driven by a decrease in cash provided by trade accounts receivable which corresponds with the decrease in revenues, partially offset by a decrease in cash used for payables and other liabilities, along with an increase in claims reserves.
Current wording
Net cash provided by operating activities decreased $23.0 million, approximately 8%, in the first six months of 2024 compared to the same period in 2023. The decrease was a result of a decrease in net income adjusted for various noncash items, partially offset by an increase in cash provided by working capital. Working capital changes were driven by an increase in cash provided by receivables, other liabilities, claims reserves, and other assets.
Previous wording
Net cash used in investing activities decreased $54.4 million, approximately 35%, in the first three months of 2024 compared to the same period in 2023. The decrease in cash used was primarily related to decreases in cash used for purchases of lease equipment, net capital expenditures, investment in notes receivable, purchases of marketable securities, and investments in equity securities.
Current wording
Net cash used in investing activities decreased $186.0 million, approximately 51%, in the first six months of 2024 compared to the same period in 2023. The decrease in cash used was primarily related to decreases in cash used for net capital expenditures, purchases of lease equipment, purchases of marketable securities, investment in notes receivable, investments in equity securities, and an increase in proceeds from the sale of off-lease inventory.
Previous wording
Net capital expenditures decreased $9.0 million in the first three months of 2024 compared to the same period in 2023. The decrease was driven by a $19.8 million decrease in purchases of transportation equipment mainly due to timing of purchases during the first quarter of 2023. Proceeds from sale of property and equipment decreased year over year primarily due to lower proceeds per sale.
Current wording
Net capital expenditures decreased $116.5 million in the first six months of 2024 compared to the same period in 2023. The decrease was driven by a $124.0 million decrease in purchases of transportation equipment mainly due to higher spend on growth and replacement equipment in 2023. Proceeds from sale of property and equipment decreased year over year primarily due to lower proceeds per sale.
Previous wording
Net cash used in financing activities increased $8.1 million, approximately 36%, in the first three months of 2024 compared to the same period in 2023 primarily due to $13.0 million of treasury stock repurchases during the first three months of 2024, partially offset by $5.0 million of net proceeds under revolving credit agreements.
Current wording
Net cash used in financing activities increased $25.7 million, approximately 34%, in the first six months of 2024 compared to the same period in 2023 primarily due to $35.0 million of net payments under revolving credit agreements during the first six months of 2024, partially offset by a decrease of $10.3 million in treasury stock repurchases.
Previous wording
See the disclosure under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for our contractual obligations as of December 31, 2023. There were no material changes to our contractual obligations during the three months ended March 31, 2024.
Current wording
See the disclosure under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for our contractual obligations as of December 31, 2023. There were no material changes to our contractual obligations during the six months ended June 30, 2024.
Rearranged current paragraphs (26)
Current report — wording carried from elsewhere
•a $7.9 million decrease in Intermodal segment revenues (excluding fuel surcharge) due to reduced revenue per order, partially offset by a slight increase in orders;
Current report — wording carried from elsewhere
Enterprise revenues (excluding fuel surcharge) decreased $23.0 million, approximately 2%.
Current report — wording carried from elsewhere
Adjusted income from operations decreased $54.4 million, approximately 51%.
Current report — wording carried from elsewhere
•Operating supplies and expenses—net increased $16.6 million, or 12%, quarter over quarter, largely resulting from lower gains on sales of equipment due to a decrease in average sales price per unit and increases in cost of goods sold in our leasing business.
Current report — wording carried from elsewhere
•an $81.9 million decrease in Logistics segment revenues (excluding fuel surcharge) driven by decreased revenue per order and a decline in brokerage volumes due to freight market conditions:
Current report — wording carried from elsewhere
Enterprise Income from Operations and Operating Ratio
Current report — wording carried from elsewhere
Enterprise operating ratio (operating expenses as a percentage of operating revenues) increased on both a GAAP and adjusted basis when compared to the same period of 2023.
Current report — wording carried from elsewhere
Key operating expense fluctuations are described below.
Current report — wording carried from elsewhere
•Fuel and fuel taxes for company trucks decreased $1.4 million, or 1%, period over period, driven by a decrease in cost per gallon, partially offset by an increase in company driver miles within Truckload. A significant portion of fuel costs are recovered through our fuel surcharge programs.
Current report — wording carried from elsewhere
Our provision for income taxes decreased $39.1 million, approximately 69%, in the six months ended June 30, 2024 compared to the same period in 2023 due to lower taxable income. The effective income tax rate was 25.0% for the six months ended June 30, 2024 compared to 24.5% for the same period in 2023. Our provision for income taxes may fluctuate in future periods to the extent there are changes to tax laws and regulations.
Current report — wording carried from elsewhere
The following tables summarize revenues and income (loss) from operations by segment.
Current report — wording carried from elsewhere
We monitor and analyze a number of KPIs to manage our business and evaluate our financial and operating performance.
Current report — wording carried from elsewhere
The following table presents our Truckload segment KPIs for the periods indicated, consistent with how revenues and expenses are reported internally for segment purposes. The two operations that make up our Truckload segment are as follows:
Current report — wording carried from elsewhere
•Dedicated- Transportation services with equipment devoted to customers under long-term contracts.
Current report — wording carried from elsewhere
•Network - Transportation services of one-way shipments.
Current report — wording carried from elsewhere
(1)Revenues (excluding fuel surcharge), in millions, exclude revenue in transit.
Current report — wording carried from elsewhere
(3)Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe.
Current report — wording carried from elsewhere
(4)Calculated excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes, using weighted workdays.
Current report — wording carried from elsewhere
(5)Revenues (excluding fuel surcharge), in millions, include revenue in transit at the operating segment level and, therefore does not sum with amounts presented above.
Current report — wording carried from elsewhere
(6)Includes entire fleet of owned trailers, including trailers with leasing arrangements between Truckload and Logistics.
Current report — wording carried from elsewhere
(7)Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
Current report — wording carried from elsewhere
The following table presents the KPIs for our Intermodal segment for the periods indicated.
Current report — wording carried from elsewhere
(1)Based on delivered rail orders.
Current report — wording carried from elsewhere
(2)Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes.
Current report — wording carried from elsewhere
The following table presents the KPI for our Logistics segment for the periods indicated.
Current report — wording carried from elsewhere
(1)Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023